Corruption hurts: Who, where, how much?

“Corruption hurts everyone, and it harms poor people the most.” That basic principle underlies the work of Transparency International [TI], the Berlin-based international group whose mission is nothing less than helping to create a world free of corruption.

Founded in 1993, TI has evolved into a global network with more than 90 chapters. The idealism of the organization is impressive, given the news we read daily about bribery, kickbacks and greed and fraud in countries all over the world. But even as it acknowledges that environment, TI persists in challenging the inevitability of corruption. Politically non-partisan, TI does not itself conduct investigations of alleged corruption or expose individual cases, but it…

bring[s] together relevant players from government, civil society, business and the media to promote transparency in elections, in public administration, in procurements and in business. TI’s global network of chapters and contacts also use advocacy campaigns to lobby governments to implement anti-corruption reforms.

Straight talk about corruption

TI defines corruption as “the abuse of entrusted power for private gain. It hurts everyone whose life, livelihood or happiness depends on the integrity of people in a position of authority.”

That definition incorporates virtually everyone. But it’s especially relevant to poor people, whose daily scramble to survive depends greatly on local, regional and national governments, and on aid organizations. In fact, says TI, corruption is both a cause of poverty, and one of the biggest barriers to overcoming it.

Most Americans would probably claim personal innocence from political corruption. Sure, we acknowledge that it exists, but we often cynically dismiss corruption-fighting as a battle against the worst of human nature. Mostly, we see corruption as an abstract concept that applies to others, and we easily dismiss it as irrelevant to our daily lives and more pertinent to Jack-Abramoff-type lobbyists and politicians who hide shoeboxes full of cash payoffs in their closets. Of course, we’re kidding ourselves. Corruption is everywhere in many forms—both obvious and subtle. And for many people around the world, corruption is a daily routine—one that limits their lives in many ways.

Transparency International makes the realities of corruption very vivid, describing impacts both small and large:

A father who must do without shoes because his meager wages are used to pay a bribe to get his child into a supposedly free school.

A small shop owner whose weekly bribe to the local inspector cuts severely into his modest earnings.

At other times, corruption’s impact is less visible, says TI:

The prosperous multinational corporation that secured a contract by buying an unfair advantage in a competitive market through illegal kickbacks to corrupt government officials, at the expense of the honest companies who didn’t.

Post-disaster donations provided by compassionate people, directly or through their governments, that never reach the victims, callously diverted instead into the bank accounts of criminals.

The faulty buildings, built to lower safety standards because a bribe passed under the table in the construction process that collapse in an earthquake or hurricane.

Measuring corruption

So, how corrupt is our world? That’s a question that Transparency International continues to try to answer, using several “corruption measurement tools.” Among these are:

The Corruption Perceptions Index [CPI], which measures the perceived level of public-sector corruption in 180 countries and territories around the world. The most recent CPI, released in 2009, ranks Somalia and Afghanistan as the countries perceived as most corrupt, while New Zealand and Denmark are perceived as least corrupt. On the CPI scale of 0-10, with 10 being the lowest level of perceived corruption, the US gets a 7.5, compared to New Zealand’s 9.4 and Denmark’s 9.3. The vast majority of the 180 countries in the 2009 CPI score below 5.

TI observes that countries perceived as the most corrupt tend to be those that have been torn apart by wars and internal strife.

The Bribe Payers Index [BPI], which evaluates the “supply side” of corruption—the likelihood of firms from 22 industrialized countries to bribe abroad. The BPI gives ratings from 0 to 10, with 10 indicating the least likely to bribe. In the most recent BPI, published in 2008, Belgium and Canada shared first place with a score of 8.8. At the other end of the spectrum, Russia ranked last, with a score of 5.9, just below China [6.5], Mexico [6.6] and India [6.8].

The BPI also shows that “construction, real estate, oil and gas companies [are] the most corruption-prone when dealing with the public sector…Public works and construction companies are most likely to exert undue influence on the policies, decisions and practices of governments.”

The Global Corruption Barometer [GCB], a public-opinion survey that assesses the general public’s perception and experience of corruption in more than 60 countries. It provides an indicator of how corruption is affecting individuals and how efforts to curb corruption around the world are perceived on the ground. The 2009 GCB found that…

The massive scale of global corruption resulting from bribery, price-fixing cartels and undue influence on public policy is costing billions…In developing..countries alone, companies colluding with corrupt politicians and government officials have supplied bribes estimated at up to $40 billion annually.” Research in the report also shows that “half of international business executives polled estimated that corruption raised project costs by at least 10 percent.”

These indices tell us a lot—perhaps more than we care to know—about the world we live in. Obviously, no country is without corruption. The differences are only in degree. What TI is doing may not end corruption or change human nature, but by raising our awareness, it might help us face reality and take action.